NDIA CONFERENCE

DLA AFLOATCol Jeff Hill

Chief, Distribution Management DivisionDefense Logistics Agency

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Today’s Presentation

• DLA Enterprise

• Transformation Overview

• DLA Afloat Initiative

• Summary

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The Enterprise

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The DLA Enterprise as of 11 October 2005

Scope of Business• 54,000 Requisitions/Day• #54 Fortune 500 – Above Walt Disney• #2 in Top 50 Distribution Warehouses• 26 Distribution Depots• 5.2 Million Items – eight supply chains• 24.7M Annual Receipts and Issues • 1411 Weapon Systems Supported• 132.8M Barrels Fuel Sold (FY 05)• $14.6B Annual Reutilizations/Disposals

• 21,039 Civilians• 523 Active Duty Military• 668 Reserve Military• Located in 48 States/28 Countries

Foreign Military Sales• Sales: $813.8M • Shipments: 501K• Supporting 124 Nations

FY01 Sales/Services: $17BFY02 Sales/Services: $21.5BFY03 Sales/Services: $25BFY04 Sales/Services: $28B FY05 Sales/Services: $31.8B FY06 Projection: $34.3B• Land/Maritime: $3.3B• Aviation: $3.6B• Troop Support: $12.9B• Energy: $11.0B• Distribution: $2.5B • Other: $1.0B• ~95% of Services’ repair parts• 100% of Services’ subsistence,

fuels, medical, clothing & textile, construction & barrier materiel

People

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Transformation

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DLA’s Top Five Priorities

• Mission –• Support to the War Fighter

• Transformation –• Enhanced Capabilities for the Future War Fighter

• People –• Transforming Our Human Capital and the Workplace

• Alignment –• To War Fighters…To Supply Chains

• One Enterprise –• Seamless Partnering for War Fighter Logistics Support

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Transformation13 Programs and Initiatives

Defense Logistics Agency

$2.1 Billion Investment$4.8 Billion Savings

to the Services thru FY11

Supplier Relationship ManagementDistribution Planning ManagementGlobal Stock PositioningExecutive AgencyBusiness Systems ModernizationIntegrated Data EnvironmentCustomer Relationship ManagementNational Inventory Management StrategyProduct Data Management InitiativeReutilization Modernization ProgramFuels Automated SystemWorkforce TransformationBase Realignment and Closure

Plus

Public/Private Competitions

Quadrennial Defense Review

Distribution Process Owner

Global Stock PositioningFY 04-11Expect

$465.4M incost

avoidance

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• Inventory Control Point-unique approach…no central strategy • Vendor-centric stock positioning tendency• Limited Service engagement• Central strategy and business rules

• Defense Distribution Center-led Stock Positioning Integrated Process Team

• Focus shift to Service/War Fighter• Services engaged• Enterprise Strategy: Global positioning in advance of requirement to increase mat’l availability/reduce wait time

• Increasing readiness while reducing cost • “Facing Fill” Targets built into Business

Systems Modernization business rules• Hub and Spoke methodology

• Service/Warfighter-centric• Services in partnership

Tailored stock profiles2 New SDPs--BRACDeployable DepotDLA Afloat

Strategic Distribution Platforms (SDP)

4 New Forward DepotsSigonella, Kuwait,

Guam, Korea

PAST

PRESENT

Global Stock Positioning (GSP) 1 of 13 Transformation Initiatives

FUTURE

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DLA Afloat Initiative

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Forward Distribution StrategyOCONUS, fixed based distribution centers

Deployable from CONUS

Mobile, forward positioned

Comprehensive Distribution Management

AIR•`

•`

SURFACE FLEXIBLE

AGILE

RESPONSIVE

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Fixed Base Forward Stocks

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Germersheim

Yokosuka

Pearl HarborPearl Harbor

Guam

KoreaKuwait

SigonellaSigonella

Decrease CWTImprove ReadinessDecrease Cost

FSL Projected Projected Actual FY05 Location # of NSNs # of NSNs Completion Date MROsGermersheim 22,250 22,250 Completed 477,695Sigonella 4,150 4,150 Completed 66,685Yokosuka 23,350 23,350 Completed 420,544Korea 14,300 14,300 Completed 61,181 Pearl Harbor 16,000 22,300 Feb 2006 161,167 Guam 5,800 8,700 Feb 2006 14,978Kuwait 32,400 40,000 Feb 2006 476,829Totals 118,250 135,050 1,679,079

(Data as of October 11, 2005)

As of 17 Oct 05:19,431 NSNs Available for Issue

500,122 MROs Processed191.2 M lbs. Shipped

Est. Cost Avoidance: $144.1 M

FY04 – 11 … $465.4 Million Net Cost Avoidance

$500M Annual DemandAll Sites

11%12%

6%2%

69%Navy Navy

Air Force Air Force

OtherOther

MarinesMarines

ArmyArmy

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Defining the Problem: A Distribution GapSolution: DLA Afloat

Leverages Peacetime Capabilities to Meet Wartime Operations

High Transportation Cost/Limited Airlift

Long Delivery Lead Time

Surface Sustainment Shipments

$.22/lb

AirSustainment Shipments

$2.66/lb

Strategic Distribution Centers

Projecting Distribution

Forward

Fills

the

Gap

Capability GapCaused By:

• Airlift Costs• Lift Availability• Shortened Delivery

Time Targets• Limited Range/Depth

of Forward Stocks• Remote Locations

Afloat SolutionAfloat Solution

First 30 Days

Look to Sustain flow

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DLA Afloat Distribution CenterVision Statement

Concept:• Forward-positioned, self-contained, mobile distribution capability• Capability to receipt, store and issue supplies tailored by DLA, COCOM and Services

• Sustainment of U.S. Military forces across range of contingency operations and exercises

• More than a preposition ship, a container ship, and a combat stores ship – has characteristics of each

End state:•A rapid, flexible, capability focused on sustaining the War fighter around the world

An Afloat Distribution Center Would Strengthen the Supply Chain By Ensuring Rapid and Flexible Material Distribution Tailorableto Theater Missions and Requirements

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DLA Afloat Distribution CenterConcept of Operations

A Working Distribution Center

Designated Ship(s) - Configured to distribute selected items within classes of supply (except fuel and ammo) to operational units; Loading and unloading - Pier side, lighterage, vertical replenishment (Helo), potential limited organic delivery (trucks). Basic Distribution Functions - (receipt, store & issue) + limited additional functions such as break-bulk.Multiple storage capabilities - Including modular containers, pallets, down to bin-able items with issue from on-board stocks.Integrated Capability - Complements DLA fixed based forward stocks & deployable distribution depot capabilities in peacetime and wartime. Contingency/Exercise Support - Immediate material backup in early deployment/ sustainment -- stocking critical, fast moving items

Tailorable Support

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Afloat Initiatives Within DoD

OSD/ Joint Staff Sea Basing JointIntegrating Concept IPT

Navy/USMCNaval Logistics CONOPS Working Group

Army G4Army Supply SupportActivity (SSA) Afloat Work Group

• OSD / Joint Staff– Joint Expeditionary

Force Projection/Sea Basing

• Navy– Joint Seabasing Lead– Sea Shield– Sea Strike

• Army– Army Supply Support

Afloat Concept• Marines

– Maritime Prepositioning Force (Future)

– Operational Maneuver fromthe Sea

• Air Force– Ammunition

Prepositioning Ships

Integrated Process TeamsDLA Afloat

Distribution Center

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DLA Afloat Distribution CenterKey Benefits

• Increased material readiness - quick-response sustainment backup support to services’ prepositioned stocks and deployed units operating requirements

• Reduced airlift cost of bulk items (construction supplies; Subsistence, etc.)

• Reduced demand on airlift re-supply missions• Minimizes land-based logistics footprint • Worldwide distribution support capability in addition to material

support for contingencies and exercises• Supports sea-based power projection concepts in both developed

and austere operational areas (e.g., ports, ship-to-ship, helo)

Provides a suite of capabilities to support the War fighter :

Working Ship in Peacetime

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DADC Time Line

Internal

√CompletedService Briefs

√Apply DORRAGap Analysis

– Refine CONOPS

√DevelopAnalysis ofAlternatives

– Submit POM (Jan/Feb06)

Mar05

End Game is to have an Afloat Capability by FY09

Jul05

Oct05

Jan/Feb06

NLT FY08

FY07Dec04

May05

– √Obtain MSC MarketSurvey

– JNT Capability Integration and Development System

– IOC – BusinessCase Analysis

– √MSC ReleaseMarketSurvey

NLT FY09

External

- OLD - NEW

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Summary

• DLA Afloat Distribution Center will provide a mobile distribution capability to the war fighter as well as the humanitarian requirements necessary to support relief efforts from natural disasters

• DLA Afloat Distribution Center is a set of capabilities that enhance DLA’s mission performance - not necessarily a single large platform

• One solution does not satisfy the range of objectives that we’ve discussed

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Summary

• Whatever we finally recommend needs to reflect the operational realities (including the humanitarian relief experienced with Hurricanes Katrina and Rita) and the flexible response required in an increasingly complex world environment

• A fiscally sound solution set of capabilities must be consistent with other Defense-wide initiatives that plan to use the sea as maneuver space